Tuesday, 25 November 2014

How to keep the new-gen employee happy

Be ready to dish out perks such as gym memberships, holidays and recreation rooms

Access to a swanky gym, library and exclusive club memberships with Saturday brunches to boot – the new-gen employee has it all and doesn’t even have to pay for it! The company will pick up the tab. Over the years, organisations seem to have found the perfect recipe to position themselves as an attractive prospect to talented jobseekers. The recipe: Take a set of conventional employee benefit plans such as PF, workmen compensation, medical and accident insurance, and add a dash of secondary benefits, which seal the deal, such as flexi-time, gyms, childcare, and gaming rooms to it – and your engagement strategy is ready!

It’s all about the frills

“We have a large percentage of gen Y employees, belonging to different lifestyle and their needs are different. They usually come straight from an engineering or an MBA institute. It is interesting to see the kinds of benefits they want, which are quite different from the conventional benefits,” says Kanika Vaish, Associate Director, Corporate HR, Emerson Electric Co.

Emerson has over 10,000 employees and offers a number of facilities, such as flexi-time, the option to work from home, gyms, libraries, a cafeteria and recreation rooms, as secondary benefits. Mamta Kanuga, Senior Knowledge Consultant at SHRM India agrees with Vaish. The Gen-Y employee’s approach to his/her work life is quite different from his predecessors. They aren’t signing up for a job as a life-long commitment. To be able to stick around, they need and want personalised treatment and portability of benefits, says Knuga.

Padding up

Secondary benefits have become a norm, but have the frills overridden the conventional benefit plans, which previously formed the basis for selecting an employer? Not yet.

A Gujarat-based diversified, manufacturing company, GHCL Ltd, offers a strong conventional employee benefit plan to its employees, these include medical expenses reimbursement, medi-claim cover (in an event of hospitalisation) for employees and their dependents, personal accident insurance benefits, life insurance cover, and superannuation schemes (to ensure regular income after retirement).

“We believe these benefits instill a sense of security in our employees and satisfaction in their lives,” says Rajesh Tripathi, Vice-President and HR Head, GHCL Ltd.

“Our employees are more concerned about their conventional benefits and they prefer them over secondary benefits,” adds Tripathi.

“The Gen-Y employee is more interested in secondary benefits such as flexi-timings, vacations, and work-from-home options. These employees consider health and pension plans more as essentials than benefits,” says Vaish of Emerson.

“But overlooking primary benefits can cause dissatisfaction at work and hence, these cannot be compensated with secondary benefits. However, providing these ancillary benefits do certainly enhance productivity and lead to increased motivation levels. Taken together, it leads to lesser attrition rate,” she adds.

The caveats

Some companies, however, have blurred the line between both kinds of benefits and devised a much complex plan for its employees. “Employers are being innovative in trying to meet employee needs and at the same time balancing the need to attract and retain talent,” says Kanuga of SHRM India. “Concern for available talent supersedes concerns related to benefit costs.”

Some of these innovative plans are an amalgamation of financial incentives aligned with secondary benefits to motivate employees. Organisations are placing greater emphasis on performance-based pay as well, as an engagement strategy for employees. For instance, Kairali Ayurvedic Group offers a number of employee benefits, including a maternity bonus, wedding bonus, and financial aid towards an education and other loans. All loans offered by the company are interest free and valid for all tiers of employees and not just the sales and marketing divisions.

“Financial aid (without any bonds) in time of need instills loyalty towards the organisation and the brand among employees,” says Abhilash K Ramesh, Group Director, Kairali Ayurvedic Group. Though employee engagement is touching newer heights, when it comes to Indian firms, challenges remain.

Changing workforce demographics, such as age, gender, culture; and managing rewards and risks under regulatory compliance and scrutiny are rising issues.

54% Indian employees remain disengaged, reveals study

Around 54 per cent of the Indian employees remain somewhat disengaged in their jobs with 9 per cent of them being completely dissatisfied, according to the Dale Carnegie India Employee Engagement Report 2014.

Despite this, Indians are significantly more engaged than their global counterparts with 46 per cent employees fully engaged in India compared to the global average of 34 per cent, the report says.

According to the report, companies in India with 1 lakh-plus employees tend to have the lowest disengaged employees (just 5 per cent) while smaller companies (500-1000 employees) had 14 per cent of their employees actively disengaged.

Further, engagement levels steadily increase with longer tenure, with a 76 per cent of those working for 20-25 years at the same organisation being highly engaged.

A closer look at the employee-supervisor relationship highlights 13 per cent of Indian employees reported major dissatisfaction with their immediate supervisor while another 45 per cent were neutral.

Again, just 31 per cent of Indian employees expressed confidence in their senior management which may reflect a gap in leadership abilities at the top.

Indian companies score high on health and well-being, indicating that employees are satisfied with infrastructure, security and hygiene measures instituted at workplaces.

The study reveals that the average hike on current salary that an employee in India would consider acceptable to leave his current job is 20 per cent. At this rate 58 per cent of the disengaged workers agreed to accept another offer against the 14 per cent of fully engaged employees.

Remarkably 30 per cent of the fully engaged employees said they would stay at their current organisation even when offered 50 per cent salary increases, thus indicating a non–monetary loyalty that companies are often hard-pressed to develop.